German researchers outline seven measures to further weaken dismissal protection, building on existing easing for high earners
Executive summary: Researchers presented seven specific measures that could further loosen Germany’s dismissal protection (Kündigungsschutz), noting that existing reforms only ease terminations for high earners and remain insufficient. Weakening dismissal protection would lower severance costs and increase hiring flexibility for companies, potentially affecting wages, job security, and industrial relations across the German economy.
Who is involved: The study’s researchers, the German federal government (which has already introduced partial reforms), employer associations, and trade unions.
Likely next: The government may evaluate the proposed measures in upcoming labor‑policy discussions, likely triggering negotiations with unions and possible legislative initiatives later in 2026.
A recent study shows that while Germany’s current reform package already makes it easier to dismiss top earners, additional steps are needed to substantially reduce the high cost of employee terminations. The findings intensify the debate over labor‑market flexibility versus worker security in Europe’s largest economy. Policymakers will likely face pressure from business groups advocating further liberalisation and from unions defending existing protections.
Timeline
- — Reform: Forscher zeigt sieben Maßnahmen: So könnte die Regierung den Kündigungsschutz wirksam aufweichen (Handelsblatt)
Analysis — what this means
Sectors affected
- German manufacturing
- German services
Regulatory implications
- Potential amendment to the German Dismissal Protection Act (Kündigungsschutzgesetz)
Historical parallels
- Hartz reforms (2003‑2005) that restructured German labor market
- Agenda 2010 reforms that introduced marginal employment (Mini‑Jobs) and eased hiring/firing rules